Demand for Greek yogurt helps to push butter prices down
In other butter news, DFA this fall is packaging its Plugra brand butter in a plastic tub.
A convergence of consumers' growing appetite for Greek yogurt coupled with their declining interest in fresh milk and changes farmers have made in animal feed have resulted in increased supplies of butterfat, a dairy expert tells Dairy Foods.
Elvin Hollon, the director of fluid marketing and economic analysis for Dairy Farmers of America, said the national dairy herd’s butterfat tests have shown a marked increase in fat content "well above historical norms, possibly in response to changes in feed rations related to record-high feed grain prices."
He added that the decline in fluid milk consumption has reduced total fat consumption while the boom in Greek yogurt (which demands more milk than traditional yogurt) pushes more fat back to the markets.
Expect butter prices to fall
"The overall increase in fat availability has made more fat available for butter churners," Hollon said. "We have made more butter each year since 2010 and look to continue that trend in 2013 and 2014. Even with very strong butter exports (which account for 5% to 9% of butter production) demand has not kept pace with supply, and butter inventories continue to build."
He added that cream has been generally plentiful, except for some seasonal variations, and churners have had all the supply they want. Hollon said domestic butter users should expect lower prices as supply adjusts to demand over the next year.
Plugra butter is sold in a tub
In other butter news, DFA this fall has begun packaging its Plugra brand butter in a plastic tub.
"By launching Plugrá butter in a tub, we are making it easier for consumers to use Plugrá on everyday food items," said DFA's Senior Associate Brand Manager, Consumer Brands, Ashley Campbell.
She said consumers are drawn toward packages that tout a convenience benefit like ready-to-use, on-the-go, bite-sized, hand-held, and foods that have the serving dish included.
"Products that have a convenience factor are outpacing the traditional product form," she said, giving the examples of tub butter versus stick butter and shredded cheese versus chunk cheese.
"Focus groups showed that the Plugrá tub would be an incremental purchase to the Plugrá solids that consumers are already purchasing for baking. Additional consumer feedback showed that one of the greatest benefits of the Plugrá tub is that it can be carried straight from the refrigerator to the dining table," Campbell said.
She added that producing the tub required some slight modifications and a minimal capital investment to the current butter line at DFA’s Winnsboro, Texas, plant.